Rates message is slowly getting through to Government

Published on Wednesday, 24 July 2013 15:47

Rates message is slowly getting through to Government

Waterford TD John Deasy, having met with the Department of Public Expenditure and Reform last week, has scheduled another meeting with senior officials in September to allow for a redraft of amendments to new legislation to factor in the difficulties businesses will have in paying additional commercial rates.

Following continued representations in the Dáil and in private meetings over the last six weeks, Deputy Deasy believes the Government is coming around to understanding that that a sudden, sharp upward adjustment in rates will put more businesses to the wall than the current revaluation exercise is worth.

The line Minister, Brendan Howlin, has responded to a Fine Gael motion – tabled by John and passed unanimously by the parliamentary party – requesting his Department to conduct an analysis of the potential impact such huge increases would have.

He conceded that, given property valuations were last calculated in 1988, it would mean “substantial changes for some ratepayers, both positively and negatively.” The feedback locally is that the retail sector is set to take a disproportionate hit.

With a post-revaluation Impact Analysis having been carried out following revaluations in South Dublin, Fingal and Dún Laoghaire-Rathdown, the Minister said: “I believe that the same type of analysis could be conducted, although at an understandably preliminary stage, for the revaluations that are now in progress in Dublin City and Waterford.”

He is to ask his officials “to advance this analysis as much as is possible”, saying “changes will inevitably result as ratepayers’ representations are considered and appeals are subsequently decided by the Valuation Tribunal.”

Though this impact assessment can’t be completed until the full revaluation in the rating areas is concluded, the findings would be “very valuable in informing policy in this area” and the Minister “will make preliminary indications available where it is prudent to do so.”

Mr Howlin’s response also makes mention of the Valuation Amendment (No. 2) Bill 2012, which he hopes to advance in the Seanad in the new term. In one of a series of statements in the Dáil on the issue, Deputy Deasy has already called on the Taoiseach to expedite the new legislation, which favours a system of self-assessment – albeit there’s no automatic panacea in that, he accepts.

However, having met with the Department of Public Enterprise and Reform (PER) in recent weeks, Mr Deasy feels the message has gotten through to Government that there’s “a problem” with the revaluation process: not least that the point in time on which it’s based – October 2011 – is “out of date.”

“Things have changed in the last two years with regard to rental values, and that isn’t taken into consideration,” he told last Thursday’s meeting of the Public Accounts Committee, which was attended by Valuation Office officials including Commissioner and CEO, John O’Sullivan, whom he met in Waterford last month.

That point “was accepted, and that’s something the Department will be looking at,” the Dungarvan-based TD said. With retailers saying this year has been the worst since the economic crisis hit, senior PER officials are also coming around to the opinion that the baseline date is obsolete.

It’s a further indication, he feels, that the “lack of cohesion” and appreciation he initially found across departments regarding the consequences of revaluation “is improving.” He told the PAC: “At this point it’s fair to say that there’s an acknowledgement within Government that there’s a problem and that something needs to be done.

“The larger issue is, in my opinion, is that this is self-defeating” – regardless of appeals and tribunal procedures, Mr Deasy said. “The difficulty is we are living in extraordinary economic times… All you’ve to do – and I’ve raised this at the committee before – is have a look at the rates arrears in this country; the amounts that have been written off.”

He has received an undertaking from PER that they will work together with the Department of the Environment, Community and Local Government over the next couple of months to “look at the legislation to see if some facilitation can be made” with regard to small businesses who’ve managed to survive but “feel victimised now by Government.”

While Deputy Deasy can’t be certain what concessions might be made to “cushion the blow” given the current “disastrous business environment”, spreading out payments over time is one option thought to be under consideration. Any deficits local authorities might find themselves with as a result will also have to be weighed up.

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